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© 2011 International Monetary Fund

July 2011

IMF Country Report No. 11/223

United Kingdom: Report on the Observance of Standards and Codes

This paper was prepared based on the information available at the time it was completed on July 11, 2011. The views expressed in this document are those of the staff team and do not necessarily reflect the views of the government of the United Kingdom or the Executive Board of the IMF.

The policy of publication of staff reports and other documents by the IMF allows for the deletion of market-sensitive information.

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International Monetary Fund

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Front Matter Page

Financial Sector Assessment Program Update

United Kingdom

Report on The Observance of Standards and Codes (ROSCs)—Summary Assessments

July 2011

International monetary Fund

Monetary and capital markets Department

Contents

• Glossary

• I. Basel Core Principles for Effective Banking Supervision

  • A. Summary, Key Findings, and Recommendations

  • B. Recommended Action Plan and Authorities’ Response

  • C. Authorities’ Response

• II. IAIS Insurance Core Principles

  • A. introduction

  • B. Key Findings and Recommendations

  • C. Conditions for Effective Insurance Supervision (ICP 1)

  • D. The Supervisory System (ICP 2 to ICP 5)

  • E. The Supervised Entities (ICP 6 to ICP 10)

  • F. Ongoing Supervision (ICP 11 to ICP 17)

  • G. Prudential requirements (ICP 18 to ICP 23)

  • H. Markets and Consumers (ICP 24 to ICP 27)

  • I. Anti-Money Laundering/Combating the Financing of Terrorism (ICP 28)

  • J. Authorities Response

• III. IOSCO Objectives and Principles of Securities Regulation

  • A. Background

  • B. Financial Services Authority Approach to Supervision

  • C. Assessment Challenges

  • D. Preconditions for Effective Securities Regulation

  • E. Main Findings

  • F. Recommended Action Plan

  • G. Authorities’ Response

• IV. CPSS Core Principles for Systemically Important Payment Systems—CHAPS

  • A. Information and Methodology Used for Assessment

  • B. Institutional and Market Structure—Overview

  • C. Main Findings

  • D. Authorities’ Response

• V. CPSS/IOSCO Recommendations for Securities Settlement Systems—CREST

  • A. Information and Methodology Used for Assessment

  • B. Institutional and Market Structure—Overview

  • C. Regulatory Structure—Overview

  • D. Main Findings

  • E. Authorities’ Response

• VI. CPSS/IOSCO Recommendations for Central Counterparties—LCH.Clearnet Limited

  • A. Information and Methodology Used for Assessment

  • B. Institutional and Market Structure—Overview

  • C. Regulatory Structure—Overview

  • D. Main Findings

  • E. Authorities’ Response

• Tables

• 1. Summary Compliance with the Basel Core Principles—ROSCs

• 2. Recommended Action Plan to Improve Compliance with the Basel Core Principles

• 3. Summary of Observance of the Insurance Core Principles—Detailed Assessments

• 4. Recommended Action Plan to Improve Observance of the Insurance Core Principles

• 5. Summary Implementation of the IOSCO Principles—Detailed Assessments

• 6. Recommended Action Plan to Improve Implementation of the IOSCO Principles

• 7. Statistical Information Regarding CHAPS

• 8. Recommended Action Plan to Improve Observance of the CPSIPS and Central Bank Responsibilities in Applying the CPs

• 9. Additional Recommendations to Go Beyond Observance of the CPSIPS and Central Bank Responsibilities in Applying the CPs

• 10. Recommended Action Plan to Improve Observance

• 11. Additional Action Plan

• 12. Summary Observance

• 13. Recommended Action Plan

• Figure

• 1. Exchanges, MTFs, and CCPs settling in CREST

Glossary